Cami Model Article Key Points

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CAMI Model Article Key Points 1. In the capacity model, the red area represents the recoverable nonproductive time, which are time that lost production and could potentially be improved. It is the manager’s primary responsibility to reduce red time by putting more capacity in use and reducing costs. The yellow area is the idle capacity, which employees use to take breaks, lunchtime, weekends, or vacations. Those capacities can be use to make more productions, once the company gets more orders and increases their productions, the yellow areas could turn into green areas, which represents the actual runtime the company takes to produce goods and provide services. It is not always a bad thing to have less green area, because less green area means that there is a lot of potential capacity the company could use to make the company more productive, and that the company could reduce more costs in the future manufacturing processes. 2. The CAM-I model was developed on an activity-based technique, by defining capacity in terms of cost and time. The costs could be traced to activities that occurred to make the end products. For example, the actual time for making 50 cupcakes is 20 minutes in a coffee shop because employees in the shop needs to take a 5 minutes break after they made 50 cupcakes. The 5-minute break is categorized as idle activity and could be improved to productive capacity if the 5 minutes are used in making cupcakes. 3. Although the CAM-I activities makes it easy for managers to identify pressing problems through the straight forward three categories, several factors could affect the capacity application result. For example, depreciations which are not correctly recorded; Blended activities that are in the gray area of being identified as productive or nonproductive; Activity drivers that were hidden when costing is based on the number of

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